Chapter 6 Review: Business Formation

What percentage of new businesses close within 5 years?

• 50%

• 37%

• 80%

• 25%

A business that is owned by a single individual is called a:

• Corporation

• Partnership

• Sole Proprietorship

• Limited Liability Company

What term is used to describe a voluntary agreement in which two or more people act as co-owners of a business for profit?

• Corporation

• Partnership

• Sole Proprietorship

• Franchise

What term is used to describe a legal entity that is separate and distinct from its owners?

• Sole Proprietorship

• Partnership

• Corporation

• Joint Venture

What is the benefit of having limited liability?

• It protects personal assets from business debts.

• It increases the tax rate for the business.

• It requires more paperwork and regulations.

• It limits the business's ability to raise capital.

An LLC is a type of business structure. What does LLC stand for?

• Limited Liability Company

• Limited Liability Corporation

• Limited Legal Company

• Limited Legal Corporation

When did LLC’s come into existence in the USA?

• 1977

• 1980

• 1985

• 1990

What form of business ownership is the most common in the USA?

• Sole Proprietorship

• Partnership

• Corporation

• Limited Liability Company (LLC)

Which form of business has the most business revenue and net income?

• Sole Proprietorship

• Partnership

• Corporation

• Limited Liability Company (LLC)

Which of the following is an advantage of Sole Proprietorships?

• Easy to establish and dissolve

• Limited liability

• Complex tax filing

• Shared decision-making

• High regulatory burden